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Competitiveness and decarbonisation: EU Commission proposes a Clean Industrial Deal

Feb 26, 2025 ,
An illustration of hexagons with symbols for different industries.
The variety of European industries. Photo by geralt on Pixabay

Brussels, 26 February 2025

Today, the Commission presents the Clean Industrial Deal, a bold business plan to support the competitiveness and resilience of our industry. The Deal will accelerate decarbonisation, while securing the future of manufacturing in Europe.

Faced with high energy costs and fierce and often unfair global competition, our industries need urgent support. This Deal positions decarbonisation as a powerful driver of growth for European industries. This framework can drive competitiveness as it gives certainty and predictability to companies and investors that Europe remains committed to become a decarbonised economy by 2050.

President Ursula von der Leyen said: “Europe is not only a continent of industrial innovation, but also a continent of industrial production. However, the demand for clean products has slowed down, and some investments have moved to other regions. We know that too many obstacles still stand in the way of our European companies from high energy prices to excessive regulatory burden. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.”

The Commission is also taking actions to make our regulatory environment more efficient while reducing bureaucratic hurdles for businesses. Today’s measures are the results  of the active engagement with industry leaders, social partners and civil society in the context of the Antwerp Declaration for a European Industrial Deal and the European Commission’s Clean Transition Dialogues.

A business plan to decarbonise, reindustrialise and innovate

The Deal focuses mainly on two closely linked sectors: energy-intensive industries and clean tech.

  • Energy-intensive industriesas they require urgent support to decarbonise and electrify. The sector faces high energy costs, unfair global competition and complex regulations, harming its competitiveness.
  • Clean Techis at the heart of future competitiveness and growth as well as crucial for industrial transformation.
  • Circularity is also a central element of the Deal, as we need to maximise EU’s limited resources and reduce overdependencies on third country suppliers for raw materials.

The Deal presents measures strengthening the entire value chain. It serves as a framework to tailor action in specific sectors. The Commission will present an Action Plan for the automotive industry in March and an Action Plan on steel and metals in Spring. Other tailored actions are planned for the chemical and clean tech industry.

Today’s Communication identifies business drivers for industry to succeed in the EU:

Lower energy costs

Affordable energy is the foundation of competitiveness. The Commission therefore adopted today an Action Plan on Affordable Energy to lower energy bills for industries, businesses and households. The Act will speed up the roll-out of clean energy, accelerate electrification, complete our internal energy market with physical interconnections, and use energy more efficiently and cut dependence on imported fossil fuels.

Boosting demand for clean products

The Industrial Decarbonisation Accelerator Act will increase demand for EU-made clean products, by introducing sustainability, resilience, and made in Europe criteria in public and private procurements. With the review of the Public Procurement Framework in 2026, the Commission will introduce sustainability, resilience and European preference criteria in public procurement for strategic sectors.

The Industrial Decarbonisation Accelerator Act will also launch a voluntary carbon intensity label for industrial products, starting with steel in 2025, followed by cement. The Commission will simplify and harmonise carbon accounting methodologies. These labels will inform consumers and allow manufacturers to reap a premium on their decarbonisation efforts.

Financing the Clean Transition

In the short-term, the Clean Industrial Deal will mobilise over €100 billion to support EU-made clean manufacturing. This amount includes an additional €1 billion guarantees under the current Multiannual Financial Framework.

The Commission will:

  • Adopt a new Clean Industrial Deal State Aid Framework. It will allow for simplified and quicker approval of State aid measures for the roll-out of renewable energy, deploy industrial decarbonisation and ensure sufficient manufacturing capacity of clean tech.
  • Strengthen the Innovation Fund and propose an Industrial Decarbonisation Bank, aiming for €100 billion in funding, based on available funds in the Innovation Fund, additional revenues resulting from parts of the ETS as well as the revision of InvestEU.
  • Amend the InvestEU Regulation to increase InvestEU’s risk bearing capacity. This will mobilise up to €50 billion in additional private and public investment, including in clean tech, clean mobility and waste reduction.

The European Investment Bank (EIB) Group will also launch a series of concrete new financing instruments to support the Clean Industrial Deal. The EIB will launch: i) a ‘Grids manufacturing package’ to provide counter-guarantees and other de-risking support to manufacturers of grid components; ii) a joint European Commission-EIB pilot programme of counter-guarantees for Power Purchase Agreements (PPAs) undertaken by SMEs and energy intensive industries; and iii) launch a CleanTech guarantee Facility under the Tech EU programme powered by InvestEU.

Circularity and access to materials

Critical raw materials are key for our industry. The EU therefore has to secure access to such materials and reduce exposure to unreliable suppliers. At the same time, placing circularity at the core of our decarbonisation strategy helps maximising the EU’s limited resources. The Commission will therefore:

  • Set up a mechanism enabling European companies to come together and aggregate their demand for critical raw materials.
  • Create an EU Critical Raw Material Centre to jointly purchase raw materials on behalf of interested companies. Joint purchases create economies of scale and offer more leverage to negotiate better prices and conditions.
  • Adopt a Circular Economy Act in 2026 to accelerate the circular transition and ensure that scarce materials are used and reused efficiently, reduce our global dependencies and create high quality jobs. The aim is to have 24% of materials circular by 2030.
Acting on a global scale

The EU needs reliable global partners more than ever. In addition to ongoing and new trade agreements, the Commission will soon launch the first Clean Trade and Investment Partnerships, which will diversify supply chains and forge mutually beneficial deals. At the same time, the Commission will act even more decisively to protect our industries from unfair global competition and overcapacities through a range of Trade Defence and other instruments. The Commission will also simplify and strengthen the Carbon Border Adjustment Mechanism (CBAM).

Ensuring access to a skilled workforce

The transformation of our industry requires skilled people and top talents. The Commission will establish a Union of Skills that invests in workers, develops skills and creates quality jobs. With Up to €90 million from Erasmus+, the Deal will help reinforce sectoral skills for strategic industries linked to the Clean Industrial Deal. The Deal also supports quality jobs, promote social conditionalities and provide further support to workers in transitions.

Background

In her political guidelines (2024-2029), President von der Leyen announced to deliver the Clean Industrial Deal within the first 100 days of the Commission’s mandate as a priority to ensure competitiveness and prosperity in the EU.

The Clean Industrial Deal builds further on the active engagement from industry leaders, social partners and civil society in the context of the Antwerp Declaration for a European Industrial Deal and the Clean Transition Dialogues.

More information
Quote(s)

Europe is not only a continent of industrial innovation, but also a continent of industrial production. However, the demand for clean products has slowed down, and some investments have moved to other regions. We know that too many obstacles still stand in the way of our European companies from high energy prices to excessive regulatory burden. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.

President Ursula von der Leyen

 

Today, Europe is making a bold business case for decarbonisation as a driver of prosperity, growth, and resilience. By committing to delivering on the Green Deal climate objectives, we are setting the stage for a sustainable future. Our plan provides the stability and confidence investors need—unlocking capital, expanding clean tech markets, making energy more accessible, and ensuring a fair, competitive landscape where businesses can thrive. But it’s also about people. This strategy is designed to create jobs, develop skills, and open opportunities for all Europeans.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition

 

Today, Europe accelerates on its twin decarbonisation and reindustrialisation. This pact aims to position Europe as a world leader in clean industries – from boosting our production « made-in-Europe », to beefing up regulatory and financial support to our most strategic industrial supply chains. It also secures our unique European model of setting decarbonisation not only as an environmental goal, but also as our economic growth strategy.

Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy

 

Europe needs to be cleaner, more competitive, and self-sufficient. The Clean Industrial Deal is our business plan: a decarbonisation strategy that re-industrialises Europe, driving competitiveness and boosting strategic independence. We’ve got a plan, and we’re putting it into action, starting today, to ensure a prosperous European future.

Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth

Source – EU Commission

 

Questions and answers on the Clean Industrial Deal

Why do we need the Clean Industrial Deal?

The EU must urgently address three challenges at once: the climate change, competitiveness and dependency on critical raw materials.

Decarbonisation is crucial to address these challenges. As the Draghi Report highlights, decarbonisation policies are a powerful driver of growth when they are well integrated with industrial, competition, economic and trade policies. This is why Europe needs a transformational business plan bringing together climate, circularity and competitiveness under one overarching growth strategy.

Competitive manufacturers drive innovation, quality-job creation and open strategic autonomy, but businesses need to be certain that large climate neutral investments in energy intensive industries and clean tech will be profitable. This is why the Clean Industrial Deal aims at creating the right conditions for the industry to invest and produce in the EU, namely by driving down energy prices and boosting demand for clean products.

What is the Clean Industrial Deal, and what does it aim to achieve?

The Clean Industrial Deal is a business plan that makes decarbonisation achievable and profitable for industry in Europe. It commits to accelerate decarbonisation, promote the circular economy and support re-industrialisation, as sources of growth and prosperity across the entire continent. The Deal offers companies long-term predictability on our climate ambition, so that they can invest and minimise investment risks.

The Deal focuses mainly on two interlinked sectors:

  • Energy-intensive industries as they require urgent support to face high energy costs, unfair global competition and complex regulations.
  • Clean-tech as this sector will drive industrial transformation, competitiveness and decarbonisation. The Deal aims at boosting demand and uptake of clean products and solutions in the EU.

The Deal makes circularity a priority. It is key to make the best possible use of the EU’s limited resources, reduce dependencies on scarce materials and enhance resilience. It reduces waste, production costs, and CO2 emissions while creating a more sustainable and competitive industrial model that benefits the environment.

Is the Clean Industrial Deal lowering the ambitions of the Green Deal?

Europe has set the ambitious target to become a decarbonised economy by 2050. It will stay the course on the objectives of the European Green Deal, with the achievement of the 55% net greenhouse gas (GHG) emissions reduction agreed for 2030, and through an intermediate 2040 target of 90%.

Especially in an unstable world, the EU’s regulatory certainty and predictability, in combination with simplified rules, is a great asset to attract investments. The actions we have taken so far are already yielding results: we are decarbonising rapidly, reducing our dependence on imported fossil fuels and tackling pollution of the environment. This Deal positions decarbonisation as a powerful driver of growth and prosperity for Europeans.

How will the Clean Industrial Deal help the EU industry?

The Clean Industrial Deal supports industry to growth and prosper, looking at the entire value chain. It focuses on:

  • Making energy more affordable as this is a key condition for the competitiveness of our industry.
  • Facilitating supply and creating demand for clean products and materials as companies need a market to make investments.
  • Making financial resources available to invest in decarbonisation and competitiveness to support industry as well as leveraging private investments. Without financial support, there will not be investments.
  • Securing access to raw materials and resources in the EU to reduce its exposure to unreliable suppliers. Putting circularity at the core of our strategy as the EU needs to secure resources, lower emissions and become more sustainable.
  • Creating partnerships to get access to global markets, setting fair conditions for companies in the EU market. Protecting the industries again unfair global competition and overcapacities.
  • Building a workforce that fits the decarbonised industry, deliver quality jobs and promote social fairness.

What are the main legislative and regulatory initiatives?

The Clean Industrial Deal sets out several legislative and regulatory initiatives to support European industries, such as:

  • The Industrial Decarbonisation Accelerator Act: it will speed-up permitting for industrial access to energy and industrial decarbonisation, such as the modernisation of steel production sites. It will also establish a low-carbon product label for steel and later cement, which will allow companies to reap the green premium and provide with information to consumers on carbon intensity of products. The Act also introduces resilience and sustainability criteria to foster clean European supply for energy-intensive sectors. These criteria (e.g. clean, resilient, circular, cybersecure) will strengthen demand for EU-made clean products.
  • The revision of the Public Procurement Directive: it will allow for sustainability, resilience and European preference criteria in EU public procurement for strategic sectors. These criteria will also be extended to incentivise private procurement, through measures such as life cycle-based CO2 emission performance standards.
  • The Circular Economy Act: it will shape a Single Market for waste and reusable materials. It will help making best use of the EU’s limited resources, reduce dependencies on scarce materials coming from unreliable supplier and enhance resilience. It will lower production costs, reduce waste and CO2 emissions and create a more sustainable industrial model that benefits the environment while enhancing economic competitiveness.
  • A new Clean Industrial Deal State Aid Framework: it will allow for a quicker approval of State aid measures for the roll-out of renewable energy, deploy industrial decarbonisation and ensure sufficient manufacturing capacity of clean tech decarbonization.
  • The delegated act on low carbon hydrogen: it will set out the conditions to produce low carbon in a pragmatic way. This completes our comprehensive regulatory framework on hydrogen, enhancing certainty and predictability for industry, which are key preconditions for companies to invest.
  • The strengthening and extension of the Carbon Border Adjustment Mechanism: it will follow a thorough review on the need to extend it to other ETS sectors and downstream products as well on the problems faced by exporters of CBAM goods. As a first but necessary step we are also today simplifying CBAM.

How will the Clean Industrial Deal speed-up permitting?

Wind projects can last up to 7-10 years, distribution grid projects up to 8-10 years and transmission grid projects up to 17 years for. However, only 7 Member States use the more flexible permitting rules of the Renewable Energy Directive. The Commission calls on Member States to urgently use these new rules. The Commission will reinforce its support to Member States by sharing best practices and recommendations and launching an implementation dialogue on energy permitting.

The upcoming Industrial Decarbonisation Accelerator Act will propose concrete measures to address permitting bottlenecks related to industrial access to energy and industrial decarbonisation, while maintaining environmental safeguards and protecting human health. Shorter deadlines for energy infrastructure will also lower energy costs.

How will the Clean Industrial Deal help secure critical raw materials for the EU industry?

It is important to ensure that the EU industry has better access to critical raw materials as they are essential for our industry to the clean and digital transitions. To do so, the Commission will prioritise the implementation of the Critical Raw Materials Act and identify a first list of Strategic Projects in March 2025 to increase EU capacity to extract, process and recycle strategic raw materials and diversify EU supplies from third countries. The Commission also proposes the creation of an EU Critical Raw Material Centre to jointly purchase raw materials with increased market power and to coordinate strategic stockpiles.

Moreover, by placing circularity at the core of our decarbonisation strategy, including with the future Circular Economy Act, the EU not only makes essential materials more affordable and accessible, but also reduces our dependencies, as materials are recovered, reused, recycled, and kept longer in the economy. The Commission will make sure that products containing valuable and scarce materials are (re-)used efficiently and as long as possible before they become waste, including through the full roll out of Ecodesign requirements.

How will the Clean Industrial Deal ensure more investments? 

EU industry needs immediate access to capital. That is why the Clean Industrial Deal provides for (1) more EU-level funding, (2) leverage private investments and (3) enhance the effectiveness of State aid in support to the Deal objectives.

To provide short-term relief the Clean Industrial Deal will mobilise over €100 billion for EU-made clean manufacturing, including an additional €1 billion guarantees under the current Multiannual Financial Framework (MFF). In the next EU budget, the Competitiveness Fund plans to establish an investment capacity for European projects with the most EU added value along the entire investment journey – from research and innovation, through scale-up, industrial deployment, to manufacturing, including clean tech and industrial decarbonisation.

The Commission will propose an Industrial Decarbonisation Bank, aiming for €100 billion in funding, based on available funds in the Innovation Fund, additional revenues resulting from parts of the ETS as well as the revision of InvestEU.

Prior to the revision of the ETS Directive in 2026, the Commission will launch in 2025 a pilot with a €1 billion auction on the decarbonisation of key industrial processes across various sectors supporting industrial decarbonisation and electrification, using a combination of existing resources under the Innovation Fund and auctions-as-a-service.

Public funding will also come from national tax incentives for which the Commission will issue recommendations on common guidelines.

In addition, a flagship Horizon Europe call of ca. €600 million will be launched under the 2026-2027 work programme to support fit-for-deployment projects.

Public funds, however, will not suffice. The Commission will soon propose a European Savings and Investments Union, including banking and capital markets. This will help leverage the enormous wealth of private savings in Europe to invest in innovation and the clean and digital transitions.

How will State aid support the objectives of the Clean Industrial Deal?

As part of the Clean Industrial Deal, the Commission will adopt a new Clean Industrial Deal State aid framework by June 2025 to accelerate the roll-out of renewable energy, deploy industrial decarbonisation and ensure sufficient manufacturing capacity of clean tech. A survey conducted by the Commission showed that the Member States need more flexibility to support decarbonisation.

The new Framework will make it easier for Member States to give aid, by simplifying State aid rules while preserving a level playing field.

The Commission will also reflect on a further simplification of the State aid rules to prioritise work on the most distortive aid measures and accelerate authorisations of compatible aid. This includes the speeding up of proposals for new Important Projects of Common European Interest, and a revision of the General Block Exemption Regulation by 2027.

More information

Source – EU Commission

 

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